Rowdy tourists spark partial Airbnb ban on Malaysian island

One of Malaysia’s top tourist draws, Penang Island, has slapped a partial ban on Airbnb Inc. and similar short-term rental services, following complaints of tourists behaving badly.

“Housing premises, be it in the form of landed properties (housing estates) or strata (high rise) properties, are not allowed to operate as short-term rental accommodation,” Penang Island Mayor Rajendran Antony said in a statement issued on May 30.

Rajendran said full implementation and enforcement of the ban would not come into force until March 1 next year, to give property owners and managers enough time to comply with the new regulations.

Penang is thought to be the first place in Southeast Asia to seek restrictions on certain short-term rentals, following in the footsteps of European cities such as Barcelona and Florence, which were suffering with too many tourists squeezing out the locals.

The ban is currently limited to Penang Island districts, rather than the mainland Penang state, and certain rentals — such as serviced apartments and home offices — will still be allowed, subject to certain restrictions. Landlords are asked to take note of guidelines on “security, public hygiene, health, social aspects and public order.”

Penang has been mulling a ban on Airbnb for over a year, following complaints of bad tourist behavior in residential areas and in a bid to revitalize the state’s hotel industry, which was hammered by Covid restrictions. Officials initially mooted an outright ban on all unlicensed short-term rentals in high-rise properties, but scaled back their demands after discussions with Airbnb.

Penang’s minister for tourism, Yeoh Soon Hin, said last year that short term rentals “should not impede the growth of the conventional hospitality industry.”

Malaysia is seeking to attract 16.1 million visitors to the country this year — 60% higher than last year’s total. Penang Island airport recorded more than 4.2 million passenger movements in 2022, or 8% of Malaysia’s total. –BLOOMBERG